Barclaycard Persistent Debt situation

elkiedee

Did they not suggest making extra payments first?

penners324

Sounds like barclaycard may have done you a favour in removing a credit line for you.

If your only paying the minimum payments on all your cards you're paying vast amounts of interest.

Only paying minimum payments will have the biggest detrimental effect on your credit history rather than 1 card account being closed

Nasqueron

Apropos of nothing, I noticed today my fixed DD for Barclaycard (0%) is only about 50p above the minimum, as the balance goes down and there is no interest, the gap should grow between payment and minimum but just amused me, hopefully they won't start telling me to pay more!

born_again

Nasqueron said:

Apropos of nothing, I noticed today my fixed DD for Barclaycard (0%) is only about 50p above the minimum, as the balance goes down and there is no interest, the gap should grow between payment and minimum but just amused me, hopefully they won't start telling me to pay more!

As it is fixed it is up to you to ensure that it will cover the minimum amount. 

true_blue_2

eskbanker said:

true_blue_2 said:

Then in December 2023 I paid off the balance in full, and I left it as it was, to my regret, I should have closed the account there and then. But I did not, and about a week after a yearly subscription charge was put on the card, they wrote to me telling me that they've reviewed the account, and it will be closed. 

[...]

It's worth mentioning that a few weeks before they closed the account, I did message their chat agents about interest rates, and asked if it was possible to lower them, and stated that otherwise it was not worth me keeping the card. So I don't know if it's just my paranoia, but I feel like they could have taken this into consideration while they reviewed my account status.

Seems to me that if you told them it wasn't worth keeping the card if they didn't lower rates and they declined to lower the rates, it's not unreasonable for that to influence their decision to exercise their prerogative to close your account.  It might seem unfair but if you'd paid the balance off in full and left the card at zero, why were you seeking lower interest rates, a request that could indeed imply that you'd be planning to run up debts again?

true_blue_2 said:

why the hell would they do this to me when I've been a good customer?

Customers going into persistent debt status aren't good customers though - many perceive that they are because they're paying interest, but the flip side is that the risk of defaulting is much higher.

true_blue_2 said:

But I am worried about how this affects my credit file? Will a forced closure of the account look bad on there?

No, the reason for closure isn't shared with credit files to the best of my knowledge.  The scores invented by the credit ratings agencies are influenced by any sort of change, so you'll see a lower number for a bit, but that's the same as if you'd chosen to close the account, and the scores are meaningless anyway, as they're not seen by prospective lenders....

Maybe that's what they did, but I think that's pretty !!!!!!. I only asked because I wanted to keep one card out of my 5 open and close the rest. So obviously, I would have kept the one with the lowest interest rates, which would be my Tesco one @ 5.9% , Barclays wanted a whopping 21.9%

Never missed a payment, never been late in the 17 years I've had credit cards! But that doesn't seem to be enough anymore. 

I hope you're right there, and yes, I know scores don't mean anything, but our "consumer" credit reports don't contain all the info, just the basics. I don't care about the card itself, but I just don't want it being on my file that Barclaycard had to close the account because of PD, which wouldn't be a true reflection of my overall status! I do plan on getting a mortgage over the next 5 years, so I just want to be sure that it won't leave a bad mark. 

Cheers!

eskbanker said:

Graham4464 said:

true_blue_2 said:

Thanks all. I was paying the recommended monthly payment and my balance was slowly coming down, the same as it was with my other cards.

That amount on your monthly statements isn't 'recommended'  - it is the minimum monthly payment. Just paying this amount can cause banks to invoke the mandatory PD policy.

It depends on exactly what OP is referring to - you're right that the contractual minimum repayment is the one prominently shown on all credit card statements, which will eventually trigger the persistent debt process, but once that reaches a certain point, card providers will sometimes recommend a higher repayment in order to make more meaningful inroads into longstanding balances, so 'recommended' may not equate to 'contractual minimum'.

https://www.moneysavingexpert.com/credit-cards/persistent-debt-help/
https://www.fca.org.uk/publication/policy/ps18-04.pdf

Yep, that is what I meant, a recommended monthly payment from Barclaycard, which apparently would have cleared my balance in 2 years or so. I was paying this for a good while, and then I started to pay OVER the recommended monthly payment. So it just doesn't make sense that they'd pull the plug on me. But all I currently care about is how it affects my file. 
Cheers

true_blue_2

elkiedee said:

Did they not suggest making extra payments first?

Yes, and I made them. I even started making extra extra payments toward the end.

penners324 said:

Sounds like barclaycard may have done you a favour in removing a credit line for you.

If your only paying the minimum payments on all your cards you're paying vast amounts of interest.

Only paying minimum payments will have the biggest detrimental effect on your credit history rather than 1 card account being closed

Nah I was going to close 4 of 5 cards anyway, I used them to cover my debts while I sat on bitcoin and then sold it and paid my debts. I only really care about how it affects my file. Cheers

Thanks all. 

eskbanker

true_blue_2 said:
Never missed a payment, never been late in the 17 years I've had credit cards! But that doesn't seem to be enough anymore. 

Absolutely - repaying debts according to the terms of the agreement is the bare minimum and won't be seen as some sort of achievement!

true_blue_2 said:

Nah I was going to close 4 of 5 cards anyway, I used them to cover my debts while I sat on bitcoin and then sold it and paid my debts.

Many mainstream banks have issues with crypto transactions (despite them being legal, etc), so did that sale involve Barclays at all?  Presumably not if you still have a current account with them....

true_blue_2

eskbanker said:

true_blue_2 said:
Never missed a payment, never been late in the 17 years I've had credit cards! But that doesn't seem to be enough anymore. 

Absolutely - repaying debts according to the terms of the agreement is the bare minimum and won't be seen as some sort of achievement!

true_blue_2 said:

Nah I was going to close 4 of 5 cards anyway, I used them to cover my debts while I sat on bitcoin and then sold it and paid my debts.

Many mainstream banks have issues with crypto transactions (despite them being legal, etc), so did that sale involve Barclays at all?  Presumably not if you still have a current account with them....

Nope I have a 2nd account at Lloyds for my crypto transactions. But yeah, banks don't seem to like people investing money into a market that they don't benefit from. Anyway, that's a whole different story. I'm pretty done with Barclays, but I've been told I should keep it open, as it's my oldest account (about 30 years). Cheers

MattMattMattUK

true_blue_2 said:

eskbanker said:

true_blue_2 said:
Never missed a payment, never been late in the 17 years I've had credit cards! But that doesn't seem to be enough anymore. 

Absolutely - repaying debts according to the terms of the agreement is the bare minimum and won't be seen as some sort of achievement!

true_blue_2 said:

Nah I was going to close 4 of 5 cards anyway, I used them to cover my debts while I sat on bitcoin and then sold it and paid my debts.

Many mainstream banks have issues with crypto transactions (despite them being legal, etc), so did that sale involve Barclays at all?  Presumably not if you still have a current account with them....

Nope I have a 2nd account at Lloyds for my crypto transactions. But yeah, banks don't seem to like people investing money into a market that they don't benefit from. Anyway, that's a whole different story. I'm pretty done with Barclays, but I've been told I should keep it open, as it's my oldest account (about 30 years). Cheers

It is not that. The issue is that many crypto investment platforms were fraudulent from the start, others were scams that did not even pretend to offer trading after getting someone's deposit. As these card payments were fraud the banks were having to reimburse people, deal with lots of complaints, people trying to get their money back etc. They then got into a situation with having to vet platforms so placed an overall ban on transactions to them, with a whitelist for some. If you are genuinely interested in investing the easiest way seems to be using PayPal, but you then loose the benefit if the site turns out to be fraudulent.

Nasqueron

born_again said:

Nasqueron said:

Apropos of nothing, I noticed today my fixed DD for Barclaycard (0%) is only about 50p above the minimum, as the balance goes down and there is no interest, the gap should grow between payment and minimum but just amused me, hopefully they won't start telling me to pay more!

As it is fixed it is up to you to ensure that it will cover the minimum amount. 

That's interesting - would they allow a fixed payment that was lower than the minimum or would the latter override it?